Question 1

The city of Ann Arbor Michigan buys a police car manufactured in Germany. In the GDP accounts this transaction is included in

Accepted Answer

A)  in government expenditures and exports. 
B)  government expenditures and imports. 
C)  exports, but not government expenditures. 
D)  imports, but not government expenditures. 
A)  in government expenditures and exports. 
B)  government expenditures and imports. 
C)  exports, but not government expenditures. 
D)  imports, but not government expenditures.

Question 2

Identify the largest and smallest components of GDP.

Accepted Answer

Consumption is the l

Question 3

The investment component of GDP refers to financial investment in stocks and bonds.

Accepted Answer

A) True 
 B)False

Question 4

Gasoline is considered a final good if it is sold by a

Accepted Answer

A)  gasoline station to a bus company that operates a bus route between San Francisco and Los Angeles. 
B)  pipeline operator to a gasoline station in San Francisco. 
C)  gasoline station to a motorist in Los Angeles. 
D)  All of the above are correct. 
A)  gasoline station to a bus company that operates a bus route between San Francisco and Los Angeles. 
B)  pipeline operator to a gasoline station in San Francisco. 
C)  gasoline station to a motorist in Los Angeles. 
D)  All of the above are correct.

Question 5

If the value of an economy's imports exceeds the value of that economy's exports, then net exports is a negative number.

Accepted Answer

A) True 
 B)False

Question 6

Which of the following is correct?

Accepted Answer

A)  Nominal GDP is always less than real GDP. 
B)  Nominal GDP is always greater than real GDP. 
C)  Nominal GDP equals real GDP in the base year. 
D)  Nominal GDP equals real GDP in all years but the base year. 
A)  Nominal GDP is always less than real GDP. 
B)  Nominal GDP is always greater than real GDP. 
C)  Nominal GDP equals real GDP in the base year. 
D)  Nominal GDP equals real GDP in all years but the base year.

Question 7

A macroeconomist is interested in

Accepted Answer

A)  explaining how changes in sellers' behavior affect prices of a particular good. 
B)  explaining price changes in a particular market. 
C)  explaining why the unemployment rate is higher. 
D)  All of the above are correct. 
A)  explaining how changes in sellers' behavior affect prices of a particular good. 
B)  explaining price changes in a particular market. 
C)  explaining why the unemployment rate is higher. 
D)  All of the above are correct.

Question 8

Table 23-11
The country of Batavia produces only chocolates and watches. Below is a table with recent information on Batavia production and prices. The base year is 2009.
 
-Refer to Table 23-11.
What was nominal GDP, real GDP, and the GDP deflator for 2010? Show your work.

Accepted Answer

Nominal GDP was $5x100 + $60x1

Question 9

Define GDP. Remember to be specific about what it includes.

Accepted Answer

GDP is the market value of all

Question 10

Suppose an economy produces only cranberries and maple syrup. In 2010, 50 units of cranberries are sold at $20 per unit and 100 units of maple syrup are sold at $8 per unit. In 2009, the base year, the price of cranberries was $10 per unit and the price of maple syrup was $15 per unit. For 2010,

Accepted Answer

A)  nominal GDP is $1800, real GDP is $2000, and the GDP deflator is 90. 
B)  nominal GDP is $1800, real GDP is $2000, and the GDP deflator is 111.1. 
C)  nominal GDP is $2000, real GDP is $1800, and the GDP deflator is 90. 
D)  nominal GDP is $2000, real GDP is $1800, and the GDP deflator is 111.1. 
A)  nominal GDP is $1800, real GDP is $2000, and the GDP deflator is 90. 
B)  nominal GDP is $1800, real GDP is $2000, and the GDP deflator is 111.1. 
C)  nominal GDP is $2000, real GDP is $1800, and the GDP deflator is 90. 
D)  nominal GDP is $2000, real GDP is $1800, and the GDP deflator is 111.1.

Question 11

When economists talk about growth in the economy, they measure that growth as the

Accepted Answer

A)  absolute change in nominal GDP from one period to another. 
B)  percentage change in nominal GDP from one period to another. 
C)  absolute change in real GDP from one period to another. 
D)  percentage change in real GDP from one period to another. 
A)  absolute change in nominal GDP from one period to another. 
B)  percentage change in nominal GDP from one period to another. 
C)  absolute change in real GDP from one period to another. 
D)  percentage change in real GDP from one period to another.

Question 12

U.S. GDP was almost $14 billion in 2009.

Accepted Answer

A) True 
 B)False

Question 13

Both the value of hamburgers sold by a restaurant and the value of the beef it used to make these hamburgers are included in GDP.

Accepted Answer

A) True 
 B)False

Question 14

The government of country A, which has adopted American GDP accounting conventions, has calculated that the seasonally-adjusted market value of all final goods and services produced within country A in quarter 1 was $5 billion. The government will report that GDP in quarter 1 was

Accepted Answer

A)  $1.25 billion at an annual rate. 
B)  $4 billion at an annual rate. 
C)  $5 billion at an annual rate. 
D)  $20 billion at an annual rate. 
A)  $1.25 billion at an annual rate. 
B)  $4 billion at an annual rate. 
C)  $5 billion at an annual rate. 
D)  $20 billion at an annual rate.

Question 15

A good is produced by a firm in 2009, added to the firm's inventory in 2010, and sold to a household in 2010. As a result, on net,

Accepted Answer

A)  2009 GDP increased and 2010 GDP decreased. 
B)  2009 GDP decreased and 2010 GDP increased. 
C)  2009 GDP did not change and 2010 GDP increased. 
D)  2009 GDP increased and 2010 GDP did not change. 
A)  2009 GDP increased and 2010 GDP decreased. 
B)  2009 GDP decreased and 2010 GDP increased. 
C)  2009 GDP did not change and 2010 GDP increased. 
D)  2009 GDP increased and 2010 GDP did not change.

Question 16

Unemployment compensation is

Accepted Answer

A)  part of GDP because it represents income. 
B)  part of GDP because the recipients must have worked in the past to qualify. 
C)  not part of GDP because it is a transfer payment. 
D)  not part of GDP because the payments reduce business profits. 
A)  part of GDP because it represents income. 
B)  part of GDP because the recipients must have worked in the past to qualify. 
C)  not part of GDP because it is a transfer payment. 
D)  not part of GDP because the payments reduce business profits.

Question 17

In 2012 a country had a real GDP $15.4 trillion and GDP deflator of 125. If that country's GDP deflator equals 115 in 2013, what is the rate of inflation in 2013?

Accepted Answer

The answer of In 2012 a country had a real...

Question 18

In 2009, government purchases was the largest component of U.S. GDP.

Accepted Answer

A) True 
 B)False

Question 19

Table 23-6
The table below contains data for the country of Batterland, which produces only waffles and pancakes. The base year is 2013.
  
-Refer to Table 23-6. In 2013, this country's GDP deflator was

Accepted Answer

A)  1.0. 
B)  100.0. 
C)  171.4. 
D)  240.0. 
A)  1.0. 
B)  100.0. 
C)  171.4. 
D)  240.0.

Question 20

Which of the following items is the one type of household expenditure that is categorized as investment rather than consumption?

Accepted Answer

A)  spending on education 
B)  the purchase of stocks and bonds 
C)  the purchase of a new house 
D)  the purchase of durable goods such as stoves and washing machines 
A)  spending on education 
B)  the purchase of stocks and bonds 
C)  the purchase of a new house 
D)  the purchase of durable goods such as stoves and washing machines

Exam 15: Measuring a Nations Income

The city of Ann Arbor Michigan buys a police car manufactured in Germany. In the GDP accounts this transaction is included in

Identify the largest and smallest components of GDP.

The investment component of GDP refers to financial investment in stocks and bonds.

Gasoline is considered a final good if it is sold by a

If the value of an economy's imports exceeds the value of that economy's exports, then net exports is a negative number.

Which of the following is correct?

A macroeconomist is interested in

Table 23-11 The country of Batavia produces only chocolates and watches. Below is a table with recent information on Batavia production and prices. The base year is 2009. -Refer to Table 23-11. What was nominal GDP, real GDP, and the GDP deflator for 2010? Show your work.

Define GDP. Remember to be specific about what it includes.

Suppose an economy produces only cranberries and maple syrup. In 2010, 50 units of cranberries are sold at $20 per unit and 100 units of maple syrup are sold at $8 per unit. In 2009, the base year, the price of cranberries was $10 per unit and the price of maple syrup was $15 per unit. For 2010,

When economists talk about growth in the economy, they measure that growth as the

U.S. GDP was almost $14 billion in 2009.

Both the value of hamburgers sold by a restaurant and the value of the beef it used to make these hamburgers are included in GDP.

The government of country A, which has adopted American GDP accounting conventions, has calculated that the seasonally-adjusted market value of all final goods and services produced within country A in quarter 1 was $5 billion. The government will report that GDP in quarter 1 was

A good is produced by a firm in 2009, added to the firm's inventory in 2010, and sold to a household in 2010. As a result, on net,

Unemployment compensation is

In 2012 a country had a real GDP $15.4 trillion and GDP deflator of 125. If that country's GDP deflator equals 115 in 2013, what is the rate of inflation in 2013?

In 2009, government purchases was the largest component of U.S. GDP.

Table 23-6 The table below contains data for the country of Batterland, which produces only waffles and pancakes. The base year is 2013. -Refer to Table 23-6. In 2013, this country's GDP deflator was

Which of the following items is the one type of household expenditure that is categorized as investment rather than consumption?

Ten Principles of Economics

Thinking Like an Economist

Interdependence and the Gains From Trade

The Market Forces of Supply and Demand

Elasticity and Its Application

Supply, Demand, and Government Policies

Consumers, Producers, and the Efficiency of Markets

Application: The Costs of Taxation

Application: International Trade

Externalities

Public Goods and Common Resources

The Costs of Production

Firms in Competitive Markets

Monopoly

Measuring the Cost of Living

Production and Growth

Saving, Investment, and the Financial System

The Basic Tools of Finance

Unemployment

The Monetary System

Money Growth and Inflation

Aggregate Demand and Aggregate Supply

The Influence of Monetary and Fiscal Policy on Aggregate Demand

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